AfricaPress-Tanzania: THE domestic credit by the banking system recorded an annual growth of 17.8 per cent in the year ending December last year compared to 7.1 per cent in December 2019 and 20.0 per cent in November last year.
According to the Bank of Tanzania (BoT) monthly economic review for January this year, the credit extended to the central government through purchase of government securities grew by 48.7 per cent, a decrease from 49.6 per cent in the preceding month.
Private sector credit maintained a positive growth rate, increasing by 596bn/-equivalent to an annual growth of 3.0 per cent, compared to 5.2 per cent registered in November last year.
The subdued growth of credit to the private sector was partly attributable to the adverse impact of Covid-19 on some businesses.
The decomposition of credit by economic activities shows that during the year ending December last year, the growth was more evident in personal activities (largely micro, small and medium enterprises), transport and communication, and mining and quarrying whose credit growth recovered from a slump sustained from February last year.
Meanwhile, personal activities continued to account for the largest share of the total outstanding credit, followed by trade and manufacturing activities accounting for 34.3 per cent, 15.4 per cent and 8.7 per cent, respectively.
In the meantime, the extended broad money supply (M3) recorded an annual increase of 1.60tri/-to 29.91tri/-in last year, a year-on-year growth of 5.7 per cent compared with a growth of 5.2 per cent that was registered in the preceding month.
Meanwhile, broad money supply (M2), that excludes foreign currency deposits, grew by 8.2 per cent compared to 8.7 per cent in November 2020.
The growth of money supply continued to be supported by increase in domestic credit.
The growth in these monetary aggregates was partly a reflection of the accommodative monetary policy stance pursued by the Bank to support growth of economic activities.
